This summer has felt like either the movie “Groundhog Day” or watching a yo-yo championship. Like Bill Murray waking up to the same old weather forecast each day, I wake up to the doom and gloom of the economic news. We are sliding into the Greatest Recession. Unemployment is severe and not improving. The meteoric surge of the deficit continues unabated. The Dow is up over 10,000 then before you know have time to click on your stock tracking app on your smartphone it has dipped back down to 9,000.
Yet common sense pulls my instinct in a different direction. And let’s just be really clear here, I am no economic expert. I don’t claim to anything about how it all actually works. I have never been to business school. I don’t read all that many books on the economy, finance, or the business world. I am no Nouriel Roubini, Robert Reich, Tom Friedman, or Warren Buffett. But I do have job, invest in a 401k and IRA, read the paper, watch the news, religiously listen to Clark Howard, and have a modicum of common sense.
So what is the problem with the economy?
Companies are continuing to report record profits this past quarter. We are returning to the airport. Delta Airlines just reported its best profit in ten years. Folks are buying plenty of iPads and iPhone 4s as Apple earnings rocketed to 78% for the quarter. Caterpillar, UPS, 3M, American Express, Microsoft are all up smartly. Our 401ks are healing a bit. Our store parking lots are not empty slabs of burning concrete like they were last July. Restaurants are filling up again. Companies are sitting on big stockpiles of cash. Huge corporations slashed their spending and operating costs and are back to running lean and mean posting huge profits again.
Most articles I do read on the economic situation end with some sort of catch-all disclaimer about, how no one ever really knows the direction the economy will take after all, it truly is an emotional and unpredictable character.
So each day as I check those Dow numbers and read the headlines, I just have to wonder is a lot of this mess in our head? Can we collectively will ourselves into and out of this recession? Are we so scarred by the recession that we are dooming ourselves for another depression? Maybe it is just this insufferable heat. The summer always seems to be a terrible time for market. The fall is much more exciting. With the upcoming election, cooler weather, a horrible history of bad stock market days in October, I bet we are in for a few more financial roller-coaster rides before the end of the year. But it could end well, right?
Finally, can someone explain to me how our elected officials are leading the charge to keep the momentum for a recovery in full swing?
I can’t seem to find that page in the 2,300 page financial reform bill, which seems to just want to throw more cold water in our nations warming economic boiler engine.
Not to mention, this ice cold water that will be added back to slow things down come January 2011.